NEW YORK, Sept. 19, 2011 /PRNewswire/ -- Life sciences companies in the U.S. raised $47 million through activity of 13 at-the-market (ATM) offerings of common stock in the second quarter of this year, according to data released today from Brinson Patrick Securities Corporation. The dollar amount represents a 2 percent decrease in the use of ATMs in the life sciences sector compared to the second quarter of 2010. Seven new ATMs were signed up in the second quarter, 11 in the first half of the year, and four so far in the third quarter. Life sciences ATM offerings in the first half of 2011 raised $113 million compared to $88 million in the first half of 2010, a 29 percent increase.
Life sciences companies that signed up to utilize ATMs to raise capital in the second quarter included Aastrom Biosciences Inc., Ann Arbor, Mich.; Curis Inc., Lexington, Mass.; Cytokinetics Inc., South San Francisco; and MediciNova, Inc., San Diego.
"As we predicted, based on recent trends, companies in the life sciences industry continued to raise capital through ATMs at an elevated level during the first half of 2011 compared with the first half of 2010," commented Todd Wyche, founder and managing director of Brinson Patrick. "The slight decrease in capital raising in the second quarter was driven by exceptionally strong first quarter ATM activity. A few life sciences companies found conditions for exercising their ATMs particularly advantageous in the first quarter and they were able to raise amounts of capital approaching those raised through more traditional (and expensive) deals. Therefore, capital that might have been raised in the second quarter was raised in the first quarter. This activity demonstrates one of the significant advantages of ATMs over conventional financings: the ability to raise capital quickly at a time of the issuer's choosing."
ATM offerings provide an efficient means of raising equity capital over time, making them ideal for raising general working capital, funding specific projects, funding research and development, and paying off debt. ATM offerings provide flexibility, efficiency, control, discretion and just-in-time capital with minimal dilution of stock when managed by an experienced ATM underwriter. With an ATM, an exchange listed company incrementally sells newly issued shares into the trading market through a designated broker-dealer at prevailing market prices, rather than via a traditional underwritten offering of a fixed number of shares at a fixed price all at once. ATMs enable publicly traded companies to tap into the existing secondary market for shares on an as-needed basis.
ATM offerings are generally less expensive and less complicated to execute than traditional equity offerings and do not require a lot of executive time. For example, there are no required executive road shows. In addition, ATMs do not dilute existing shareholders through discounting or issuing warrants that are common to traditional capital raises.
"The number of life sciences companies with available ATMs continues to grow. Based on this trend, we expect that the amount of capital raised through ATMs will continue to increase," added Wyche.
About Brinson Patrick Securities Corporation
Brinson Patrick Securities Corporation is a boutique investment bank that employs a single financing tool, DOCS® (Dynamic Offering of Common Stock) at-the-market (ATM) financing facility, to raise capital for clients as they need it without the dilution that occurs with more traditional financing vehicles and with little or no impact on the stock price.
The DOCS® ATM is a low-profile equity offering that is appropriate for publicly traded companies across multiple industries and market capitalizations. It has been successfully utilized by companies in the energy, life sciences, technology, real estate, financial services and hospitality industries with market capitalizations that range from $50 million to more than $1 billion. In each case, what makes Brinson Patrick and its specialized offering a fit is a desire on the part of companies to better manage and control the fundraising process. Although Brinson Patrick's experience crosses multiple industries, the firm's life sciences and real estate practices are based on a deep understanding of the challenges faced by companies in these industries.
Brinson Patrick is a FINRA member broker-dealer.
EDITOR'S NOTE: Click here to access Todd Wyche's biography, photograph and a Brinson Patrick fact sheet.
SOURCE Brinson Patrick Securities Corporation